A holistic functional analysis of a flexibility aggregator in a dynamic market environment

Advances in the implementation of smart grid technologies opened the path towards aggregation of granular distributed energy resources (DER). The aggregated resources can deliver significant flexibility and are expected to have a significant role in the energy market of the near future. The aggregated flexibility from low voltage end-user assets can be optimized towards responding to explicit signals of ancillary services procurement from the balancing responsible party; or it can respond to pricing signals from day-ahead or intra-day market. A first step is to outline the aggregator role and its inputs and outputs enabling market integration with other participants, as well as contractual implementation. Ensuring proper interactions and defining responsibilities is conducive to the formation of an environment where the aggregator operates in a significant capacity. This work aims to provide a functional analysis of an aggregator entity - mainly, how DER assets, capable of delivering flexibility are aggregated, grouped and optimized to provide reliable demand response services, while also dynamically adapting to constraints set by owners of individual DER flexibility assets. The paper delivers an analysis of aggregator interaction with other stakeholders. This work facilitates integration of the aggregator in all aspects of the functioning energy grid, from the technical to the market layer, identifying opportunities and barriers along the way.